Strong Release Slate May Bolster Q2 Rental Tally20 May, 2004 By: Melinda Saccone
Consumer spending at the rental counter appears to be picking up slightly in the second quarter of the year, thanks to a host of strong new releases.
With first-quarter spending down 16.5 percent, it is unlikely, even with the most optimistic expectations, that rental revenue will forge ahead of 2003 at midyear.
Also, the question remains, will consumer dollars skew more toward the sales counter or the rental counter as some of 2003's biggest releases hit video?
The second quarter fields six releases that have earned more than $100 million in theaters, with half of them falling into the May lineup. These box office blockbusters have helped push the overall theatrical take of the second-quarter release slate to nearly $1 billion, up 21.6 percent from their 2003 counterparts.
The strength of Q2 titles released through May 11 has thus far translated into more rental dollars. In the first seven weeks of the quarter, consumers have doled out $1.11 billion at the rental counter, up 3.6 percent from the comparable seven-week period last year.
With six weeks left to go in the quarter and some of the biggest titles yet to be released, rental performance in Q2 could very well hinge on how well the rest of the month unfolds as the box office strength of June releases fall just shy of 2003 tallies.
While the box office strength of May releases generated an astounding 86 percent more revenue in theaters than their 2003 counterparts, the majority of that revenue can be attributed to New Line Home Entertainment's The Lord of the Rings: The Return of the King, which grossed $376.9 million theatrically. However, even with Return of the King out of the mix, rental performance in May will still play a critical role, as it is the strongest month theatrically year-over-year for the quarter.
The bigger question is, will consumers opt to buy rather than rent the third installment of the trilogy, which will be released this week, or for that matter, any of the other big blockbusters still yet to be released? If records are broken at the sales counter, odds are rental revenue will suffer.